This application is for a SBIR Phase II grant. One of the major causes of morbidity and mortality of low birth weight neonates relates to injury, inflammation, perforation and obstruction of the lower GI tract, which can be manifest in the related diseases Necrotizing Enterocolitis (NEC) and Spontaneous Intestinal Perforation (SIP). These digestive diseases, which affect 2-5% of preterm babies, frequently require major surgery and are associated with a mortality rate of 20-50%. The etiology of both NEC and SIP have yet to be fully elucidated, and risk factors that have been identified, in addition to a birth weight o <1.5 kg, include formula feeding and the use of indomethacin, the standard of care to treat and/or prevent the development of Patent Ductus Arteriosus (PDA), a condition which results in the circulation short-circuiting the pulmonary vasculature, leading to inadequate oxygenation, increasing the risk of intraventricular hemorrhage, bronchopulmonary dysplasia, and death. In this Phase II application we will further develop and evaluate a novel proprietary parenteral formulation of indomethacin, in which the NSAID is non-covalently associated with phosphatidylcholine (PC) to make it safer for the GI tract. This composition of Indomethacin-PC (PL4500) appears to reduce the GI injury caused by indomethacin alone in adult animals. In the prior Phase I experiments, we found that there was an apparent resistance to GI toxicity of indomethacin in rat neonates before weaning if the animals were breast- fed, but not if they were formula-fed. Also, during weaning there were developmentally increasing levels of both intestinal bile acid and ileal bile acid uptake transporter (apical sodium-dependent bile acid transporter, ASBT) which may be associated with indomethacin GI toxicity. It is important for later FDA filings to understand the possible mechanism of GI injury by indomethacin and how indomethacin-PC may offer protection. Thus, the first aim is to evaluate the GI toxicity of indomethacin-PC versus unmodified indomethacin in neonatal mice by comparing toxicity in breast-fed and formula-fed mice at different postnatal ages; comparing toxicity in a model of NEC; and comparing toxicity in wildtype and ASBT knockout mice and in mice induced to express ASBT early. The second aim is to determine the efficacy of indomethacin-PC versus indomethacin in a model of PDA. The third aim is to carry out technology transfer to a contract commercial manufacturer and initiate scale- up of Indomethacin-PC production, with the goal of yielding a prototype parenteral formulation that is suitable for stability, dispersibility, and subsequent safety evaluation in Phase I clinical trials. The development activities encompassed in this grant proposal will significantly advance PL4500 toward commercialization. If the Indomethacin-PC formulation continues to possess an improved GI safety profile, together with equivalent efficacy compared with indomethacin, it will represent an important improvement in the standard of care for the treatment of low birth weight neonates with potential or confirmed PDA, by reducing risk of developing NEC and SIP, devastating diseases of the GI tract.